2015 (11) TMI 463 - AT - Central Excise

Denial of refund claim - interest paid under protest - Held that - interest amount of ₹ 1,23,369/-was paid under protest as per the records available, also undisputed is that appellant was sanctioned the refund of CVD which was wrongly paid by them by an order No RGD/MHD/RFD-487/06-07 dated 12.03.2007 and the same is not challenged by the revenue.- It can be seen that the adjudicating authority has correctly recorded the facts and sanctioned the refund claim which is in accordance with the law - order of commissioner (appeals) rejected the refund is incorrect and liable to be set aside - Decided in favour of assessee.

Summary

Issues Involved:
- Rejection of refund claim paid as interest under protest during proceedings.
- Appeal against first appellate authority's decision setting aside the refund claim.
- Dispute over filing refund claim for interest paid under protest.

Analysis:

Issue 1: Rejection of refund claim
The appeal was against the rejection of a refund claim of Rs. 1,23,369 paid as interest under protest during proceedings. The adjudicating authority initially sanctioned the refund claim, but the revenue appealed to the first appellate authority, which set aside the original order and allowed the revenue's appeal. The appellant contended that the first appellate authority erred in not considering the factual matrix of the case. The appellant had initially debited CVD in DEPB licenses, took Cenvat credit, reversed the amounts under protest, and later re-credited them based on a circular. The appellant filed a refund claim, which was sanctioned but did not include the interest paid under protest. The first appellate authority wrongly stated that no appeal was filed against a previous order, which the appellant contested. The appellant argued that the interest paid under protest should be refunded.

Issue 2: Appeal against first appellate authority
The first appellate authority upheld the revenue's appeal, stating that the interest was due, confirmed, and paid for wrongly taking credit and subsequently reversing it. The authority held that since no appeal was filed against the previous order, the interest was not refundable. However, the appellate tribunal found that an appeal was indeed filed and had attained finality. The tribunal emphasized that the interest amount paid by the appellant should not be required, especially since the Customs duty issue had been resolved and finalized. The tribunal concluded that the impugned order was incorrect and set it aside, allowing the appeal with any consequential relief.

Issue 3: Refund claim for interest paid under protest
The adjudicating authority correctly recorded the facts and sanctioned the refund claim for the interest paid under protest. The authority found that the appellant had availed credit in violation of a circular, reversed the credit under protest, and later filed a refund claim. The first appellate authority, however, misdirected itself by stating that no appeal was filed against a specific order, which was contested by the appellant. The tribunal noted that the interest amount paid under protest should be refunded, especially since the Customs duty issue had been resolved and finalized.

In conclusion, the appellate tribunal set aside the first appellate authority's decision and allowed the appeal, emphasizing the need to refund the interest paid under protest, which was a separate issue from the previous proceedings.